Power Of Attorney: A Vital Tool When Used Right

We never know what tomorrow may bring. An unexpected medical condition could leave you in a position where you are unable to handle your financial affairs. In that event, if you have not already nominated a Power of Attorney (POA), then your family may face a financial emergency during an already stressful situation. A POA can step in and ensure that needed financial decisions are made while you recover from your medical crisis. Failure to nominate may lead to time consuming and expensive court proceedings, and the Court may not pick who you want. So, don’t delay have that conversation with your family and name your POA while you’re healthy.

Carefully Draft Your Power Of Attorney
Nominating the person who you trust enough to serve as your POA is not a decision to be taken lightly. Your POA holds considerable power and abuse sadly is all too common. A well drafted POA, however, can lower the risk of abuse. Transparency and good record keeping are the key. Any POA should keep an accounting of all transactions they make on behalf of the principal, but a well drafted POA will require regular accountings. Name a trusted family member or friend for your POA to report to. The saying, “trust but verify” is a good rule. Involving more than one family member or friend can lower the likelihood of financial abuse and also improve family harmony. Nothing builds suspicion in a family faster than having someone making financial decisions in secret.

When POA Powers Begin
Generally, the standard form used to nominate a POA assumes that the power is immediate. That is as soon as you sign the form your nominee immediately possesses the power to handle your finances even though you are perfectly healthy. This is done for the sake of convenience. If the POA is conditioned on the health of the principal, then it can be a hassle for the POA to have to constantly provide medical assessments to prove their authority. You can if you wish make a “springing POA” that only takes effect in the event of your incapacity. This is usually not advised due to the difficulty of proof. There are a couple points here to consider. For one, if you don’t want to give immediate authority to your POA because of a lack of trust, then maybe you shouldn’t be nominating them at all. If you can’t trust them when you’re healthy, then you sure can’t trust them when you have lost capacity. Another option better than the springing POA, is to draft the document, but just don’t physically deliver it to your POA. Let them know where it is and then they can access it in the event of your incapacity. A POA in the drawer is far better than requiring your family to have to go to court to have a conservator named.

The Medical POA
One last thing to consider is that a general POA does not include the authority to make medical decisions. Generally, the medical POA is a separate form. While you may nominate the same person to be both your general POA and your medical POA, you just need to use separate forms. Having the same person for both may in some cases be appropriate, but not always. The two positions really require different sets of skills. They both need to be a person you can trust. However, the general POA should be someone good with money, detail oriented, and responsible with keeping good records. The Medical POA needs to be a person who understands what your wishes are when it comes to giving consent to medical procedures. Your medical POA should be someone that you have had difficult conversations with concerning your wishes for end of life care. Finally, your medical POA needs to not only know your wishes, but they have to have the courage to make tough decisions that they would rather not make. Completing your Living Will and nominating a medical POA can be a great gift to your family. Reduce the chance of confusion and possible argument by letting your family know your mind while you are still healthy.

Written by:  Corey R. McCool of McCool Law PLLC.

For more information, please visit: https://mccoollaw.org

Corey R. McCool is an elder law attorney with a practice focus on estate planning, Medicaid planning, and guardianships. He is a member of the Idaho State Bar, the Taxation, Probate, & Trust Law Section; the National Academy of Elder Law Attorneys, and the Trust and Estate Professionals of Idaho. Corey also serves on the Board of Directors for the Idaho Guardian and Fiduciary Association. Corey is passionate about advocating for the preservation of dignity for vulnerable adults.